T. Rowe Price says to increase stake in UTI AMC beyond 26%

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T. Rowe Price has said it will increase its stake beyond 26% in UTI AMC "in due course". It is the single largest shareholder in the fund.

T. Rowe Price would, however, retain the UTI brand for the AMC business, it said.

India, it said, was a critically important investment market. On how emerging markets were now rising to become the global investment hot-spots, it said: "We're seeing growth in emerging market funds from the US. More American retail investments would start going overseas and the home bias to investment would change."

In an interview with CNBC-TV18, Edward Bernard, Vice Chairman, T. Rowe Price said, "I would say that it is fair to say that we publicly stated that it would be our interest to increase our stake over time. I wouldn't even begin to know how to predict right now over what timeframe and how that would take shape."

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: We are ironically talking on the first anniversary of Barak Obama, lots of talk about how well he has dealt with the issue, and we all know the entire economy went through in the past year as well, do you think the worst is behind us? Do you think the problems that you went through, I must say you are one of the few institutions which came out very strong out of it, how would you really relate this one year and how it went?

A: In terms of T Rowe Price, we actually fared relatively quite well and that is partly because we are focused on only one business which is wealth investment and management; we are not engaged in investment banking, commercial banking and proprietary trading. We maintain a strong balance sheet, so as some firms were worried about keeping the doors open and we were able to just focus on our clients and investors.

As far as for the broader economy is concerned, clearly I think we would say that the worst is behind us and assessing the job that is being done by all the various officials involved, I think we will need a little perspective of history to judge that, this was one of the more complex challenges in the financial and economic markets. The one thing I would give a lot of governments credit for is that it was clear that one had to add a lot of liquidity into system and you weren't quite sure what would have worked; often governments when they try one program they don't want to try something else because it suggests that the first one didn't work, you didn't have time to find out this time. So I think it's very difficult to know how bad things might have been had the steps been taken or not been taken.

Q: So you would give it what, an eight out of ten?

A: That is a tough call and we will have to let history make that judgment.

Q: When you say that the worst is behind us and in the last year or so for instance as far as India is concerned, we have seen increasing flows coming back to this country as well and perhaps to many other emerging markets as well, do you see that trend continuing there as well therefore or do you see some amount of money remaining in the home market as well?

A: Investors in the US, particularly the more sophisticated ones, understand the long term story of emerging market in general and economies like India in particular. So anyone with a long time horizon 5-10-15 years is certainly going to have a portion of portfolio allocated in this area.